Graduating from college brings with it many things - four years of academic achievement, a degree, and for some... substantial financial debt.
Continuing our student debt conversation we spoke today with Detroit Free Press financial columnist Susan Tompor. Pam Fowler, Executive Director of Financial Aid at the University of Michigan, also joing us.
According to Tompor, one of the primary reasons students fall so deeply into debt is their failure to record the money they borrow.
“Students don’t keep track of how much they’re borrowing,” said Tompor.
It is important, said Tompor, that students assess the long-term costs and benefits of their chosen degree.
Some degrees take more than four years to earn, causing students to spend more on their education and subsequently accrue greater debt.
“It starts earlier, where the degree is coming from and how long it will take to get that degree. You need to try to get out in four years and that may limit your borrowing,” said Fowler.
According to Fowler, there are options for students with a large amount of debt. One can make payments based on 10% of one’s discretionary income over a span of 25 years to fully pay off a debt.
Both guests noted the importance of not defaulting on payments.
“You can run into bad legal consequences and it becomes a huge problem,” said Tompor.
Tompor cited a useful source- Consumer Financial Protection Bureau- a step-by-step guide to college loan payments.
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